Royal Caribbean Group’s global supply chain is continuously adapting to innovations around sustainability and guest experiences
Over the course of 2024, more than 30 million people are expected to choose a cruise for their perfect vacation. Promising to deliver exciting onboard activities and multiple locations with a variety of itineraries, cruise vacations offer guests a relaxing onboard experience, as they cruise overnight and simply wake up, ready to explore a new destination.
Offering the ultimate vacation with elevated experiences, Royal Caribbean Group delights millions of customers every year across its portfolio of industry-leading brands including Royal Caribbean, Celebrity Cruises (Celebrity), and Silversea, as well as its joint ventures with TUI Cruises and Hapag-Lloyd Cruises. With Icon of the Seas, currently the largest cruise ship in the world, in its fleet, the company prides itself on continuous innovation. Each successive class of its ships are architectural marvels that offer breath-taking entertainment, world-class accommodation, and myriad activities to suit all customers’ requirements.
Royal Caribbean Group was established in 1968 by a hospitality entrepreneur and three Norwegian ship owners who set out to create a cruise line to sail the Caribbean. The company’s first ship set sail from Miami in 1970, followed by two more ships in the next two years. The initial ship designs pioneered wide, open-air decks and round-cantilevered Viking Crown Lounges that made the company’s ships stand out.
Committed to innovation
Such industry innovation has remained constant throughout the company’s growth, from hotel, dining, and entertainment options to safety, technology, and destination development. In 2020, Royal Caribbean Group adopted its current name and updated its logo to reflect its status as a parent company for a portfolio of brands and experiences.
Today, the company travels to nearly 1000 destinations around the globe, from Alaska and colorful Caribbean towns to Asia’s ancient temples and Europe’s old-world cities. Its portfolio of destinations even includes exclusive locations, such as Perfect Day at CocoCay, the company’s private island paradise in the Bahamas, and new experiences like Perfect Day Mexico, Royal Beach Club Paradise Island, Royal Beach Club Cozumel, and the southernmost hotel on Earth in Puerto Williams, Chile, for its Antarctica expeditions.
Destinations are not the only thrill on offer; the ships are designed to capture the imagination and ensure guests are constantly delighted. Whether it’s rock climbing, ice skating, simulated skydiving, or a visit to the largest waterpark at sea, there are plenty of options for entertainment, but there are also spa treatments, sun decks, and exclusive restaurants for those guests looking for the ultimate relaxation experience.
Seamless supply
From the perspective of guests and crew, the resources they need seamlessly appear at hand whenever they need them. Behind the scenes, however, there is a hundreds-strong global sourcing team working tirelessly to ensure procurement is optimized and convenient. Having spoken with James Wells, Global Chief Supply Chain Officer, just over a year ago, we’re keen to hear what the last 12 months have brought for the company’s supply chain.
“As a complete organization and a global supply chain team, we’ve been hitting our stride, ensuring high-quality service across the board as we continue to grow,” James begins. “Anyone keeping up with the quarterly updates from our senior executives will know about the organization’s impressive growth, both in terms of our fleet and our procurement operations.
“It has been a whirlwind of a year, with several ongoing initiatives across the supply chain to enhance guest experiences and streamline internal operations. We’re a large global team with a responsibility to support a fleet of 68 ships across our brands, as well as our guests and crew, by leveraging our strategic network of thousands of suppliers. In recent years, the company has been constantly hitting new milestones in passenger numbers and by bringing new experiences and activities onboard.
“The global supply chain plays a key role in the execution of these new activities and additional destinations, as many of these developments require us to source unique items from all around the world,” he continues. “We work shoulder-to-shoulder with the commercial teams to bring sourcing insights and category intelligence to collaborative discussions, allowing us to make informed decisions that keep us a step ahead of our guests’ expectations. It’s easy for global supply chains to be reactive, but we have a naturally curious mindset and lean into our supplier base to gain active insights into guest behavior and preferences.
“It is our mission that guests come onboard our state-of-the-art ships and are delighted by everything that we have to offer without thinking about the backstage operations that ensure a seamless experience. Aside from welcoming millions of guests every year, we also service and care for thousands of crew members and deliver the equipment they need, when they need it.”
Remaining optimistic
Given the mass disruption and operational challenges threatening supply chains over recent years, James has a unique approach to such issues. “One thing is constant in global supply chains – disruption,” he states. “There are always issues, whether it’s a shortage of specific components or a geographic region disturbed by geopolitical conflict. However, the challenges we’ve faced in the last few years have been exacerbated by occurring simultaneously, and we’ve seen large regional disruptions in global transport lanes causing lead times to be doubled or even quadrupled.
“Some of these events can happen in a moment’s notice, forcing supply chain executives to react by leveraging various contingency plans. To ensure resiliency, every supply chain must not only have a ‘plan B,’ but also a plan C and D. At Royal Caribbean Group specifically, we’ve evaluated our strategy for sourcing each one of our unique items to find the most innovative and reliable method. We’ve implemented new technologies in several categories and we’re continuously innovating to find successful strategies within the movement, handling, and transportation of goods.
“We’re also continuing to invest in improving our back-office functions, including implementing a new ERP system to create a better user experience for two important stakeholders: our employees and our suppliers,” James explains. “For our employees, the new system will reduce the administrative burden and free up time for them to engage with suppliers in innovative discussions. For our supply network, on the other hand, the new system will foster a more self-sufficient experience and improve the efficiency of the administrative processes across our end-to-end value chain.”
Powerful partnerships
From speaking with James, it’s clear to see that Royal Caribbean Group successfully leverages relationships across its supplier base to continuously innovate. “In our food and beverage supply chain, we’ve worked with our suppliers on packaging and shipping methods to maintain the freshness of the products,” he shares. “Some suppliers have opted to shorten the transport time, while others have reduced packaging. In terms of our pallets, we’ve removed much of the plastic and shrink-wrap and are finding more intelligent ways of palletizing goods.”
On the topic of sustainability, James adds: “SEA the Future, which stands for Sustaining the planet, Energizing communities, and Accelerating innovation, is our company-wide series of sustainability strategies, targets, and goals. Our entire organization is genuinely passionate about the environment; we deliver amazing vacations that visit some of the most beautiful places in the world, so it’s in our DNA to set the best example of how we can preserve and maintain these pristine places.
“There are several ongoing initiatives within the business, from reducing plastic to more efficient energy management. In terms of the supply chain, we’re finding new, local communities where we can source products closer to where we operate to reduce our transportation miles. As a result of this optimization, we’ve successfully reduced our total supply chain miles despite growing as an organization and adding more ships and destinations to our portfolio. It’s a counterintuitive statistic to think that we’ve grown so much but the miles from our total movement of goods and services have shrunk.
“We are also spearheading the industry’s adoption of alternative fuels and building some of the most energy efficient ships in the industry. This includes our recent ships powered by LNG and biofuels, and our soon-to-debut Celebrity Xcel, which will feature the first tri-fuel capable engine and is able to run on methanol. The sourcing of both LNG and biofuels is a huge investment across our brands, and one that is deepening our connection with key suppliers. As we’ve shifted from what have historically been transactional relationships into strategic partnerships, these relationships have been crucial to our success in recent years. Together with our network, we continue to innovate in the field of engines, fuels, and power management to remain a step ahead of guest expectations.
“Another global innovation in our industry is shore power, which enables the supply of electricity to a ship from the shore while docked, allowing the ship to shut down its engines while docked,” James explains. “We’re working with port communities and making investments in our world-class fleet to ensure our ships are prepared to accept shore power as it becomes available at different stages around the globe.”
People make the difference
As our conversation ends, we ask James to share his thoughts on how the global supply chain team will continue to support the company’s operations. “There’s constant innovation happening across the business, from new destinations to creative entertainment and new food and beverage concepts, and it’s our responsibility to ensure the supply chain is resilient to delight guests at every interaction,” he says. “It’s our promise to deliver the vacation of our guests’ dreams, and across our thousands of items, we strive to source the highest quality products at a cost competitive level to deliver maximum value.
“Global sourcing and procurement are not static, but dynamic; we must respond to world events, market innovations, and changes in guest behavior and expectations,” James concludes. “It’s going to be an exciting few years for us and I expect further announcements and milestones as we continue to deliver the ultimate vacations. Our phenomenal employees and suppliers across the globe make all our goals possible, and I look forward to collaboratively building a company that will allow for personal and professional development alongside our corporate successes.”
With James at the helm of global sourcing strategy, Royal Caribbean Group will undoubtedly continue to thrive as it delivers exceptional vacations for millions of guests. Committed to innovation, sustainability, and guest experiences, the company is redefining what it means to vacation at sea while setting new industry standards. Whether it’s building more sustainable ships, adding destinations, or sourcing innovative food and beverage options, Supply Chain World is eager to follow what happens next for the company.